Allied Irish Banks to make sharp cost cuts

Allied Irish Banks to make sharp cost cuts

DUBLIN - Reuters
Allied Irish Banks (AIB) said it will make aggressive cost-cuts, on top of job losses already announced, after it narrowed its full-year loss to 2.3 billion euros ($3.05 billion) from more than four times that amount the previous year.

Forced to ditch its international ambitions after Ireland’s devastating property crash saddled it with huge losses, AIB was effectively nationalised late last year and saved from collapse by emergency European Central Bank (ECB) funding.

The bank’s 2011 after-tax loss dropped from a record 10.2 billion euros the previous year and was helped by a 3 billion euro income gain from forcing losses on junior bondholders and a further 1.6 billion from exiting its Polish operations.

AIB recognised net total provisions of 8.2 billion euros for the period to end-December 2011.

After announcing earlier this month that it would axe 2,500 jobs, the bank said further significant cuts were needed after seeing its net interest margin, the profitability of its lending, fall to 1.03 percent from 1.31 percent a year ago.